Study finds gaps in bundled colectomy payments

 

CHICAGO – As Medicare transitions to a value-based model that uses bundled payments, oncologic surgeons and medical institutions may want to take a close look at enhanced recovery pathways and more minimally invasive surgery for colectomy in both benign and malignant disease to close potential gaps in reimbursement and outcomes, according to a retrospective study of 4-year Medicare data presented at the Society of Surgical Oncology Annual Cancer Symposium here.

“In the index admission portion of the episode costs, when comparing benign versus malignant disease, the benign disease costs more,” said Byron D. Hughes, MD, of the University of Texas, Galveston. “Postdischarge costs for cancer patients were not readily captured; however, there are opportunities to reduce the cost for both disease processes by using enhanced recovery pathways and minimally invasive surgery [MIS]. We report that prior to broad implementation of value-based bundled payment systems, a better understanding is required.”

The study evaluated reimbursement rates of three Medicare Severity–Diagnosis Related Groups (MS-DRG) assigned to the study cohort of 10,928 cases in the Medicare database from 2011-2015: 331 (benign disease), 330 (colon cancer/no metastases), and 329 (metastatic colon cancer). “There is little data comparing the relative impact of MS-DRG on cost and reimbursement for oncologic versus benign colon resection as it relates to the index admission, post-acute care costs, and Centers for Medicare & Medicaid Services total costs,” Dr. Hughes said.

With descriptive statistics, the study showed that benign resection resulted in higher average total charges than malignant disease ($66,033 vs. $60,581, respectively; P less than .001) and longer hospital stays (7.25 days vs. 6.92; P less than .002), Dr. Hughes said. However, Medicare reimbursements were similar for both pathology groups: $10,358 for benign disease versus $10,483 for oncologic pathology (P = .434). Cancer patients were about 25% more likely to be discharged to a rehabilitation facility than were those in the benign group (16.6% vs. 12.4%, respectively; P less than .001).

“What we know from other data is that, compared to fee-for-service for surgical colectomies, a value-based payment model resulted in lower payments for the index admission,” Dr. Hughes said. “A greater proportion of these patients also contributed to a negative margin for hospitals when compared to the fee-for-service model, as well as a higher risk across acute care services.”

Of patients in the study cohort, 67% had surgery for malignant disease. Both benign and malignant groups had more open colectomies than minimally invasive colectomies: 60% and 36.8%, respectively, of procedures in the benign group and 63% and 40% in the cancer group (P less than .001).

 

The goal of the study was to identify potential gaps in adopting MS-DRG for the bundled payment model in benign versus malignant colectomy, Dr. Hughes said. The study identified three gaps:

• DRG poorly differentiates between benign and malignant disease. This problem is evidenced by the higher cost for the index admission in benign disease. “Whereas in malignant disease, there is a greater unrecognized cost-shifting to post-acute care services which are not addressed by the DRG system,” he said.
• The dominance of open colectomy where MIS could reduce episode costs. The study cited research that reported the advantages of MIS include lower episode costs in both younger and older patients, by $1,466 and $632, respectively; shorter hospital stays by 1.46 days; 20% lower 30-day readmissions rates; and lower rates of post-acute care services (J Laparoendosc Adv Surg Tech A. 2017 Dec 13. doi: 10.1089/lap.2017.0521)
• Potential for DRG migration from code 331 (benign disease) to 330 (colon cancer but not with metastasis). Dr. Hughes and his coauthors published a study that reported a 14.2% rate of DRG migration in this same Medicare cohort, that is, classified as 331 on admission but migrated to 330. So, compared with other patients, this group ended up with longer LOS (7.6 vs. 4.8 days); higher total charges ($63,149 vs. $46,339); and higher CMS payment ($11,159 vs. $7,210) (Am J Surg. 2018;215:493-6). “We also identified a potential role for enhanced-recovery pathways to mitigate these factors,” he said.

He noted that the different stakeholders – hospitals, surgeons, anesthesiologists, hospitalists, other physicians, nurses, and extenders – will have to resolve how to divide bundled payments. “The biggest thing is communication between these groups, because moving forward CMS is trying to step away from the role of determining who gets paid what,” Dr. Hughes said. He noted this finding is consistent with his own previously published findings, along with those from senior study coauthor Anthony J. Senagore, MD, FACS, on resource consumption in value-based care.

Dr. Hughes and coauthors reported having no financial disclosures. Dr. Hughes is supported by the National Institute of Diabetes and Digestive and Kidney Diseases of the National Institutes of Health.

SOURCE: Huges BD. SSO 2018.

 

CHICAGO – As Medicare transitions to a value-based model that uses bundled payments, oncologic surgeons and medical institutions may want to take a close look at enhanced recovery pathways and more minimally invasive surgery for colectomy in both benign and malignant disease to close potential gaps in reimbursement and outcomes, according to a retrospective study of 4-year Medicare data presented at the Society of Surgical Oncology Annual Cancer Symposium here.

“In the index admission portion of the episode costs, when comparing benign versus malignant disease, the benign disease costs more,” said Byron D. Hughes, MD, of the University of Texas, Galveston. “Postdischarge costs for cancer patients were not readily captured; however, there are opportunities to reduce the cost for both disease processes by using enhanced recovery pathways and minimally invasive surgery [MIS]. We report that prior to broad implementation of value-based bundled payment systems, a better understanding is required.”

The study evaluated reimbursement rates of three Medicare Severity–Diagnosis Related Groups (MS-DRG) assigned to the study cohort of 10,928 cases in the Medicare database from 2011-2015: 331 (benign disease), 330 (colon cancer/no metastases), and 329 (metastatic colon cancer). “There is little data comparing the relative impact of MS-DRG on cost and reimbursement for oncologic versus benign colon resection as it relates to the index admission, post-acute care costs, and Centers for Medicare & Medicaid Services total costs,” Dr. Hughes said.

With descriptive statistics, the study showed that benign resection resulted in higher average total charges than malignant disease ($66,033 vs. $60,581, respectively; P less than .001) and longer hospital stays (7.25 days vs. 6.92; P less than .002), Dr. Hughes said. However, Medicare reimbursements were similar for both pathology groups: $10,358 for benign disease versus $10,483 for oncologic pathology (P = .434). Cancer patients were about 25% more likely to be discharged to a rehabilitation facility than were those in the benign group (16.6% vs. 12.4%, respectively; P less than .001).

“What we know from other data is that, compared to fee-for-service for surgical colectomies, a value-based payment model resulted in lower payments for the index admission,” Dr. Hughes said. “A greater proportion of these patients also contributed to a negative margin for hospitals when compared to the fee-for-service model, as well as a higher risk across acute care services.”

Of patients in the study cohort, 67% had surgery for malignant disease. Both benign and malignant groups had more open colectomies than minimally invasive colectomies: 60% and 36.8%, respectively, of procedures in the benign group and 63% and 40% in the cancer group (P less than .001).

 

The goal of the study was to identify potential gaps in adopting MS-DRG for the bundled payment model in benign versus malignant colectomy, Dr. Hughes said. The study identified three gaps:

• DRG poorly differentiates between benign and malignant disease. This problem is evidenced by the higher cost for the index admission in benign disease. “Whereas in malignant disease, there is a greater unrecognized cost-shifting to post-acute care services which are not addressed by the DRG system,” he said.
• The dominance of open colectomy where MIS could reduce episode costs. The study cited research that reported the advantages of MIS include lower episode costs in both younger and older patients, by $1,466 and $632, respectively; shorter hospital stays by 1.46 days; 20% lower 30-day readmissions rates; and lower rates of post-acute care services (J Laparoendosc Adv Surg Tech A. 2017 Dec 13. doi: 10.1089/lap.2017.0521)
• Potential for DRG migration from code 331 (benign disease) to 330 (colon cancer but not with metastasis). Dr. Hughes and his coauthors published a study that reported a 14.2% rate of DRG migration in this same Medicare cohort, that is, classified as 331 on admission but migrated to 330. So, compared with other patients, this group ended up with longer LOS (7.6 vs. 4.8 days); higher total charges ($63,149 vs. $46,339); and higher CMS payment ($11,159 vs. $7,210) (Am J Surg. 2018;215:493-6). “We also identified a potential role for enhanced-recovery pathways to mitigate these factors,” he said.

He noted that the different stakeholders – hospitals, surgeons, anesthesiologists, hospitalists, other physicians, nurses, and extenders – will have to resolve how to divide bundled payments. “The biggest thing is communication between these groups, because moving forward CMS is trying to step away from the role of determining who gets paid what,” Dr. Hughes said. He noted this finding is consistent with his own previously published findings, along with those from senior study coauthor Anthony J. Senagore, MD, FACS, on resource consumption in value-based care.

Dr. Hughes and coauthors reported having no financial disclosures. Dr. Hughes is supported by the National Institute of Diabetes and Digestive and Kidney Diseases of the National Institutes of Health.

SOURCE: Huges BD. SSO 2018.

 

CHICAGO – As Medicare transitions to a value-based model that uses bundled payments, oncologic surgeons and medical institutions may want to take a close look at enhanced recovery pathways and more minimally invasive surgery for colectomy in both benign and malignant disease to close potential gaps in reimbursement and outcomes, according to a retrospective study of 4-year Medicare data presented at the Society of Surgical Oncology Annual Cancer Symposium here.

“In the index admission portion of the episode costs, when comparing benign versus malignant disease, the benign disease costs more,” said Byron D. Hughes, MD, of the University of Texas, Galveston. “Postdischarge costs for cancer patients were not readily captured; however, there are opportunities to reduce the cost for both disease processes by using enhanced recovery pathways and minimally invasive surgery [MIS]. We report that prior to broad implementation of value-based bundled payment systems, a better understanding is required.”

The study evaluated reimbursement rates of three Medicare Severity–Diagnosis Related Groups (MS-DRG) assigned to the study cohort of 10,928 cases in the Medicare database from 2011-2015: 331 (benign disease), 330 (colon cancer/no metastases), and 329 (metastatic colon cancer). “There is little data comparing the relative impact of MS-DRG on cost and reimbursement for oncologic versus benign colon resection as it relates to the index admission, post-acute care costs, and Centers for Medicare & Medicaid Services total costs,” Dr. Hughes said.

With descriptive statistics, the study showed that benign resection resulted in higher average total charges than malignant disease ($66,033 vs. $60,581, respectively; P less than .001) and longer hospital stays (7.25 days vs. 6.92; P less than .002), Dr. Hughes said. However, Medicare reimbursements were similar for both pathology groups: $10,358 for benign disease versus $10,483 for oncologic pathology (P = .434). Cancer patients were about 25% more likely to be discharged to a rehabilitation facility than were those in the benign group (16.6% vs. 12.4%, respectively; P less than .001).

“What we know from other data is that, compared to fee-for-service for surgical colectomies, a value-based payment model resulted in lower payments for the index admission,” Dr. Hughes said. “A greater proportion of these patients also contributed to a negative margin for hospitals when compared to the fee-for-service model, as well as a higher risk across acute care services.”

Of patients in the study cohort, 67% had surgery for malignant disease. Both benign and malignant groups had more open colectomies than minimally invasive colectomies: 60% and 36.8%, respectively, of procedures in the benign group and 63% and 40% in the cancer group (P less than .001).

 

The goal of the study was to identify potential gaps in adopting MS-DRG for the bundled payment model in benign versus malignant colectomy, Dr. Hughes said. The study identified three gaps:

• DRG poorly differentiates between benign and malignant disease. This problem is evidenced by the higher cost for the index admission in benign disease. “Whereas in malignant disease, there is a greater unrecognized cost-shifting to post-acute care services which are not addressed by the DRG system,” he said.
• The dominance of open colectomy where MIS could reduce episode costs. The study cited research that reported the advantages of MIS include lower episode costs in both younger and older patients, by $1,466 and $632, respectively; shorter hospital stays by 1.46 days; 20% lower 30-day readmissions rates; and lower rates of post-acute care services (J Laparoendosc Adv Surg Tech A. 2017 Dec 13. doi: 10.1089/lap.2017.0521)
• Potential for DRG migration from code 331 (benign disease) to 330 (colon cancer but not with metastasis). Dr. Hughes and his coauthors published a study that reported a 14.2% rate of DRG migration in this same Medicare cohort, that is, classified as 331 on admission but migrated to 330. So, compared with other patients, this group ended up with longer LOS (7.6 vs. 4.8 days); higher total charges ($63,149 vs. $46,339); and higher CMS payment ($11,159 vs. $7,210) (Am J Surg. 2018;215:493-6). “We also identified a potential role for enhanced-recovery pathways to mitigate these factors,” he said.

He noted that the different stakeholders – hospitals, surgeons, anesthesiologists, hospitalists, other physicians, nurses, and extenders – will have to resolve how to divide bundled payments. “The biggest thing is communication between these groups, because moving forward CMS is trying to step away from the role of determining who gets paid what,” Dr. Hughes said. He noted this finding is consistent with his own previously published findings, along with those from senior study coauthor Anthony J. Senagore, MD, FACS, on resource consumption in value-based care.

Dr. Hughes and coauthors reported having no financial disclosures. Dr. Hughes is supported by the National Institute of Diabetes and Digestive and Kidney Diseases of the National Institutes of Health.

SOURCE: Huges BD. SSO 2018.